Sperry, Hitachi Hold ‘Cooperation’ Talks
U.S. computer giant Sperry, which has been seeking a merger partner for months, said Monday that it is holding exploratory talks with the Japanese electronics conglomerate Hitachi on “some form of cooperation.”
At the same time, Hitachi stepped up its “Americanization” program by announcing plans to manufacture computer disk drives at a new plant in Norman, Okla., that will eventually employ 500.
New York-based Sperry is the world’s seventh-largest computer maker and last year had sales of $5.7 billion. Like other second-tier computer firms, Sperry has been searching for ways to compete with dominant IBM. Merger talks with Burroughs, the No. 3 computer firm, broke off in June. Hitachi’s sales last year were $20 billion.
Sperry said that it and Hitachi, a diverse firm noted for its semiconductors and mainframe computers, are assessing possible “mutual benefits” from cooperating in computers, semiconductors, software and computer accessories.
“Both companies believe their individual technical strengths are complementary enough to make this evaluation worthwhile,” Sperry said.
They said they are also negotiating Sperry’s purchase of computer accessories from Hitachi and have entered a joint-development effort centered on the possibility of using Hitachi technology in Sperry computer systems.
Hitachi sources said that it has been rumored for weeks that the Japanese firm was negotiating to buy part of Sperry, though that would be a departure for Hitachi. The company has preferred 100% ownership to equity positions in other firms.
Hitachi already sells its mainframe computers in the United States through another U.S. firm, a subsidiary of National Semiconductor. It is only a marketing arrangement, however.
Analyst George Haloulakos, who follows Hitachi for the Cable, Howse & Ragen brokerage in Seattle, said a linkup with Sperry would tend to ease trade friction, a major goal of Hitachi. Sperry’s thousands of established customers would also represent potential new computer business for Hitachi. However, Haloulakos speculated that any merger would be a long way off.
“If that were in the cards, it would be done on a gradual basis,” he said.
Hitachi’s new U.S. disk-drive venture, which was expected, is to begin production by April, 1987, with 100 employees making large-scale disk storage drives for use in mainframe computers. Hitachi said it expects employment to reach 500 by 1991 and its investment to total $45 million.
Seeking to defuse criticism of certain alleged trading practices, Hitach is also expected to add production of videocasette recorders to its color television plant in Anaheim. The company makes semiconductors near Dallas and has eight other small U.S. plants.
